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LONDON-Lloyd's of London's confidence in its future may be slightly dampened by the rare withdrawal by a Lloyd's broker, which is leaving partly because it finds the market is no longer financially rewarding.

The decision of FMW International Insurance Brokers Ltd. to leave the exclusive market effective Feb. 1 marks the first time in recent years that a Lloyd's broker has decided to quit the market.

The departure comes as a blow to the market's confidence, which was buoyed after the successful adoption of its restructuring plan in late 1996.

An additional embarrassment for Lloyd's is that FMW's chairman, Peter Nutting, was recently elected to the Council of Lloyd's.

Vincent Murphy, FMW's managing director, said that the broker's decision to leave Lloyd's of London was based primarily on financial considerations.

Among them, FMW's withdrawal means it will avoid having to contribute to brokers' share of Lloyd's financial reorganization, which would have cost the firm an estimated (British pounds)300,000 ($508,500) over the next five years.

In addition, FMW estimates that it will have to pay only around (British pounds)100,000 ($169,500) a year for professional liability insurance as a non-Lloyd's broker, rather than the (British pounds)300,000 a year it pays for the coverage as a Lloyd's broker.

This is because underwriters regard Lloyd's brokers as having greater exposure to liability for underwriting decisions, partly as a result of Lloyd's brokers' binding authority to place business with underwriters, according to Mr. Murphy.

An additional consideration is that FMW does only around 1% of its approximately (British pounds)8 million ($13.6 million) a year in brokerage revenues through Lloyd's, which it believes hardly justifies the (British pounds)350,000 ($577,500) it pays in annual subscriptions and levies to Lloyd's.

The broker concentrates mainly on placing insurance for housing associations-groups that provide low-cost housing-and most of this business is placed outside of Lloyd's anyway.

Mr. Murphy said that what little business FMW may still want to place at Lloyd's-primarily coverage for motor fleets-can be done through one of the market's service companies.

Mr. Murphy also cited a survey of FMW's top 300 corporate clients in which 98% saw no advantage to them of FMW being a Lloyd's broker.

Furthermore, the client survey showed that there could be a disadvantage in that some FMW clients viewed being a Lloyd's broker as a link with the financial problems that beset Lloyd's in the past and led to its costly reconstruction.

Lloyd's only comment on FMW's withdrawal came from a press spokesman who said the move is "a decision which is up to them."